Saturday, October 25, 2008
Friday, October 10, 2008
Thoughts
/News/Food/
It's local pear and apple season again - time to overdose on fruit.
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/News/Weather/
The rainy season has returned mostly - glad we were able to fit in a final camping trip at the end of the season before the clouds returned - larger pics are at www.maslows.net:12110/rainier/
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/News/Economics/
Earlier in the year I made a few semi-educated guesses about the economy and invested/shuffled the 401k accordingly... let's see how I've done so far.
- with regards to the 401k - moving a vast majority of the equity positions into money market funds was smart - even small % gains are better than nothing.
However I did leave a small bit in equities as an experiment and it has been ugly - pretty much no sector has escaped the downturn and a couple have seen ~50% declines - total amount of value 'lost' year to date has been about 1.5 paychecks - academically bad, but not so in the long term
- real estate - sold the house and have stayed as far away from the housing market as possible, economically - this has been good - and until the rental to monthly payment numbers wherever I live are comparable I'll hold this mentality
- cash - currently just living frugally (no surprise to anyone that knows me I guess) and putting the remainder into higher interest online savings accounts - this is the best use of money right now in my opinion, as the trend is deflationary - just need to be aware that it will flip eventually and not losing value in real terms will matter again
Things that have surprised me - Europe seeing as much downturn as the US - I expected their market to be more conservative than the US banks. As such I strongly considered opening a Euro or CHF denominated account earlier in the year, but if everyone's market weakens together there isn't any advantage to the other currencies. The dollar has strengthened very slightly vs. those two currencies since then, but I think it's just a question of relativity.
The current news/fear about the economy - it's not that bad - if the government would have let the first few banks go bankrupt and actually followed through with a quick and orderly valuation and resale of assets at market prices it would have prevented where we are now. This is the root cause of what is paralyzing the market. No one trusts that the other person's asset valuation is correct or that they are actually solvent. So lending slows and confidence and stock prices decline. How to fix it - throwing money at the banks to prop up 'mark to model' asset values is not the answer - correct and transparent asset valuation is the answer. Let bankruptcy courts sort out the details - they're there for a reason.
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/News/Politics/
Neither candidate has given a good answer as to how they'll deal with the economic mess. Neither has really acknowledged that their grand plans of energy independence and lower taxes will not be feasible given the debt load of the US and its nearly-nationalized banks.
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That's about all for now - now that the clouds have returned I'll probably pick up on the nerd projects I talked about earlier in the year - make a couple speaker enclosures, possibly build a tube amp, play some computer games, read more of the classics, learn a new language, so on... need to be productive with this free time.
It's local pear and apple season again - time to overdose on fruit.
---------------
/News/Weather/
The rainy season has returned mostly - glad we were able to fit in a final camping trip at the end of the season before the clouds returned - larger pics are at www.maslows.net:12110/rainier/
---------------
/News/Economics/
Earlier in the year I made a few semi-educated guesses about the economy and invested/shuffled the 401k accordingly... let's see how I've done so far.
- with regards to the 401k - moving a vast majority of the equity positions into money market funds was smart - even small % gains are better than nothing.
However I did leave a small bit in equities as an experiment and it has been ugly - pretty much no sector has escaped the downturn and a couple have seen ~50% declines - total amount of value 'lost' year to date has been about 1.5 paychecks - academically bad, but not so in the long term
- real estate - sold the house and have stayed as far away from the housing market as possible, economically - this has been good - and until the rental to monthly payment numbers wherever I live are comparable I'll hold this mentality
- cash - currently just living frugally (no surprise to anyone that knows me I guess) and putting the remainder into higher interest online savings accounts - this is the best use of money right now in my opinion, as the trend is deflationary - just need to be aware that it will flip eventually and not losing value in real terms will matter again
Things that have surprised me - Europe seeing as much downturn as the US - I expected their market to be more conservative than the US banks. As such I strongly considered opening a Euro or CHF denominated account earlier in the year, but if everyone's market weakens together there isn't any advantage to the other currencies. The dollar has strengthened very slightly vs. those two currencies since then, but I think it's just a question of relativity.
The current news/fear about the economy - it's not that bad - if the government would have let the first few banks go bankrupt and actually followed through with a quick and orderly valuation and resale of assets at market prices it would have prevented where we are now. This is the root cause of what is paralyzing the market. No one trusts that the other person's asset valuation is correct or that they are actually solvent. So lending slows and confidence and stock prices decline. How to fix it - throwing money at the banks to prop up 'mark to model' asset values is not the answer - correct and transparent asset valuation is the answer. Let bankruptcy courts sort out the details - they're there for a reason.
---------------
/News/Politics/
Neither candidate has given a good answer as to how they'll deal with the economic mess. Neither has really acknowledged that their grand plans of energy independence and lower taxes will not be feasible given the debt load of the US and its nearly-nationalized banks.
--------------
That's about all for now - now that the clouds have returned I'll probably pick up on the nerd projects I talked about earlier in the year - make a couple speaker enclosures, possibly build a tube amp, play some computer games, read more of the classics, learn a new language, so on... need to be productive with this free time.
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